On 1/1/20, Coke Co. paid $2,800,000 to acquire all of the common stock of Dodo Corp. On that date, Dodo's equity included $1,000,000 capital stock and $1,600,000 of retained earnings. An appraisal of Dodo's assets identified a patent that had a market value of $140,000 and a life of 5 years that was unrecorded. Dodo's reported earnings for 2020 totaled $512,000 and it paid $160,000 of dividends during the year. The amortization of allocations related to the investment was $28,000. Coke's net income, not including the investment, was $3,310,000, and it paid dividends of $950,000.

Assuming that you are consolidating trial balances on 12/31/20, what consolidation worksheet entries should Coke make to eliminate the investment account? You do not need to allocate the differential.

Answer rating: 100% (QA)

1Statement of net asset as on date of acquisition 112020 share capital ... View the full answer